Trash talk: It’s Comcastic

Comcast has been on a roll lately, trashing first Verizon and then AT&T in …

Someone apparently dumped a bottle of Tough Talk in the Comcast excutive Kool-Aid bowl, because the company has been talking some serious trash this month. The object of Comcast's scorn is the telcos, notably Verizon and AT&T, which are in the midst of a multi-billion dollar fiber rollout. The eventual goal for both companies is to eat cable's bread and butter—the home television market. Verizon has already launched trials of its FiOS TV service in select markets and plans to bring the goodness of 300+ fiber optic channels to its entire coverage area in the next two years, while AT&T is prepping an IPTV service dubbed "U-verse" for launch later this year. But is cable worried?

"AT&T is spending years and billions of dollars to imitate a network that Comcast has already built," Comcast spokesman Andrew Johnson said in a statement. "We've seen nothing ... that we can't exceed."

Similar digs were taken at Verizon by Comcast CEO Brian Roberts a few weeks ago, when he said that Verizon would spend "gobs of money" but remain a fourth-tier player in the television market. Roberts also took the opportunity to remind his company's customers exactly why they pay so much.

"There is a perception that cable companies have the best products so we can charge the most."

Why the hate? Roberts himself hinted at the reasons in his own talk, where he lamented Comcast's falling stock price and claimed that his company was undervalued by investors. Trashing everyone else in the market can simply be another way of talking up your own stock, and that's what it looks like in this case.

The FUD is clearly driven by fear of the telcos, which have amazingly deep pockets and are all itching to provide full "triple play" (voice, video, and data) service to their customers. Triple play matters so much to every company in the industry (including Comcast, whose fliers encouraging me to subscribe to all three services currently generate a significant portion of my recycling each week) because it offers them the opportunity to become the single provider of communications services to the home. Whoever controls that line stands to make a whole lot of money.

The reality is that Comcast may have to drop its prices. As Verizon VP Marilyn O'Connell pointed out at an FCC hearing a few weeks ago, cable has been forced to drop prices an average of 15 percent in the few places where they have wireline competition. Competition from the telcos will no doubt make it hard for the cable industry to continue raising its rates more than 3.5 times the rate of inflation, as happened between 1998 and 2003 (the most recent numbers available), but should be good for the consumer.